Hunt told the Commons culture, media and sport select committee on Thursday that the Gambling Commission was looking at whether the Health Lottery is diverting money from smaller society lotteries and good causes.

"I am worried about the Health Lottery because protecting the income of good causes is a very, very important responsibility that this government has," he told MPs on the committee.

The Health Lottery has attracted criticism from leading charity figures and the National Lottery operator, Camelot, since it launched last month.

Critics have complained that the lottery donates the bare minimum – 20.3p in every £1 – to good causes, and that its unconventional structure is potentially in breach of the Gambling Act 2005.

The Health Lottery draw is broadcast on Desmond-owned Channel 5 on Saturday nights.

Hunt said: "The National Lottery was set up in way that will generate money for those good causes and society lotteries are allowed on the basis that they are local lotteries. We are doing some work at the moment to look at what the impact of the Health Lottery might be on good cause revenues."

The Gambling Act states that small society lotteries must operate and be branded individually and have a revenue cap of £10m.

The Health Lottery has been accused of effectively operating as an alternative national lottery, with a £510m turnover cap from its 51 individual lotteries. Critics point out that each of the 51 Health Lottery companies has the same three directors, office address and branding.

Martin Hall, the Health Lottery chief executive, dismissed the criticisms, saying the initiative aimed to generate at least £50m in extra funding for charities. Hall added that the marketing around the launch of the Health Lottery in September had benefited Camelot by raising its profile. Camelot pointed out that it achieved record ticket sales in the financial year 2010/11.

"We know from recent data that sales in the National Lottery are in fact £50,000 higher per draw since the launch of the Health Lottery, proving the marketing maxim that a launch will also drive sales for the market leader and generally refresh consumer interest in a category," Hall said.

"Over the course of a year, these figures show that Camelot could expect to increase sales by around £5m and therefore increase contributions to their good causes by an additional £1.4m. When this is added to the £50m of new money the Health Lottery will generate, this is excellent news for charities, with no losers in sight."

Hall also defended the structure of the Health Lottery, saying it represented 51 local society lotteries, "so that on average three times a year each local society lottery has funds to allocate to local health causes in their area.

"This delivers an even spread of funding for good causes across the country, and is a different approach to the National Lottery, where a disproportionate amount of good cause funding is allocated within the M25."

Asked by the committee chairman, John Whittingdale, whether the Health Lottery was legal and whether the government would take action, Hunt said: "We are looking at that at the moment. It's a matter for the Gambling Commission. Let me say this, if they conclude that what's happening is not legal then we expect them to take robust action."

The Gambling Commission said it did not comment on individual cases. However, a freedom of information request published by the commission on Wednesday makes it clear the government can alter the regulation if it feels that large umbrella lotteries "circumvent the existing limits" on society lotteries. Camelot wrote a letter of complaint to the commission earlier this month.

Therese Coffey, a Tory MP and culture select committee member, also asked Hunt whether media plurality rules needed to ensure that one medium was "not just free advertising" for another, with reference to Desmond's Daily Express and Daily Star and what she called their "complete obsession" with the Channel 5 owner's Big Brother and Health Lottery operations.

Hunt replied: "Yes, I think that's right."

The culture secretary also signalled an end to opt-in self-regulation of the newspaper industry.

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